IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-30396

PERSHING, L.L.C., 

 Plaintiff - Appellee

v.

THOMAS KIEBACH; MARCEL DUMESTRE; MARGARET DUMESTRE; 

MAMIE HELEN BAUMANN, Through power of attorney Mamie C. 

Sanchez; JOSEPH BECKER; ET AL,

 Defendants - Appellants

Appeal from the United States District Court 

for the Eastern District of Louisiana

Before JOLLY and JONES, Circuit Judges, and MILLS∗

, District Judge.

EDITH H. JONES, Circuit Judge: 

This is an interlocutory appeal of the district court’s order denying 

Appellants’ Fed. R. Civ. Pro. 12(b)(1) motion to dismiss, for lack of subject 

matter jurisdiction, Appellee’s motion to confirm an arbitration award. 

Adopting the better reasoned approach to the amount in controversy under 

these circumstances, we AFFIRM the district court’s order and hold that the

monetary amount sought in the underlying arbitration is the amount in 

controversy for purposes of diversity jurisdiction. 

 

∗ District Judge of the Northern District of Mississippi, sitting by designation.

United States Court of Appeals

Fifth Circuit

FILED

April 6, 2016

Lyle W. Cayce

Clerk

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I.

 Appellants are investors who suffered financial losses as a result of 

R. Allen Stanford’s Ponzi scheme. In their arbitration complaint, seeking $80 

million in damages, Appellants alleged that Appellee (“Pershing”), a clearing 

broker for Stanford Group Company, failed to disclose adverse financial 

information. After a two week hearing, a Financial Industry Regulatory 

Authority (“FINRA”) panel rejected Appellants’ claims, but it awarded them 

$10,000 in compensation for certain arbitration-related expenses. On 

November 7, 2014, Pershing filed, pursuant to Section 9 of the Federal 

Arbitration Act (“FAA”), 9 U.S.C. §1, et seq., a motion to confirm the arbitration 

award.

 Because the arbitration award fell below the amount in controversy for 

federal jurisdiction, 28 U.S.C. §1332(a), Appellants sought dismissal.1 On 

April 22, 2015, the district court denied Appellants’ motion, holding that the 

$75,000 amount in controversy requirement was met. Pershing LLC v. 

Kiebach, 101 F. Supp. 3d 568 (E.D. La. 2015). The district court noted, 

however, that federal courts have disagreed about the proper standard for 

determining the amount in controversy in the context of confirming an 

arbitration award below $75,000, and proceeded to certify the issue for 

interlocutory appeal pursuant to 28 U.S.C. § 1292(b). This court granted leave 

to file an interlocutory appeal, and Appellants timely appealed.

 

1 Appellants also filed a motion to vacate the arbitrator’s award in New York federal 

court, before voluntarily dismissing that action and filing a similar motion to vacate in 

Louisiana state court. That case was later removed to the Middle District of Louisiana, where 

it has been stayed pending the resolution of the present matter. 

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II.

This court applies a de novo standard of review and uses the same 

standard as the district court when reviewing a 12(b)(1) motion to dismiss. 

LeClerc v. Webb, 419 F.3d 405, 413 (5th Cir. 2005). Issues of subject matter 

jurisdiction are questions of law reviewed de novo. Am. Rice, Inc. v. Producers 

Rice Mill, Inc., 518 F.3d 321, 327 (5th Cir. 2008). “It is to be presumed that a 

cause lies outside [a federal court’s] limited jurisdiction, and the burden of 

establishing the contrary rests upon the party asserting jurisdiction.” 

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S. Ct. 1673, 

128 L. Ed. 2d 391 (1994) (internal citations omitted).

III.

This court granted an interlocutory appeal to decide whether the amount 

in controversy for establishing diversity jurisdiction over a petition to confirm 

an arbitration award is the amount awarded by the arbitration panel or the 

amount previously sought in the arbitration proceeding.2

Courts that have confronted this issue generally follow one of two 

approaches—the award approach or the demand approach. Karsner v. 

Lothian, 532 F.3d 876, 882 (D.C. Cir. 2008). “[U]nder the award approach, the 

amount in controversy is determined by the amount of the underlying 

arbitration award regardless of the amount sought.” Id.; Baltin v. Alaron 

Trading Corp., 128 F.3d 1466, 1472 (11th Cir. 1997); Ford v. Hamilton Invs., 

Inc., 29 F.3d 255, 260 (6th Cir. 1994). In contrast, “[under] the demand 

 

2 “Although the FAA constitutes federal law, ‘the Supreme Court has interpreted the 

statute as not itself bestowing jurisdiction on the federal district courts.’” Karsner v. Lothian, 

532 F.3d 876, 882 (D.C. Cir. 2008) (quoting Kasap v. Folger Nolan Fleming & Douglas, Inc., 

166 F.3d 1243, 1245-46 (D.C. Cir. 1999); see also Southland Corp. v. Keating, 465 U.S. 1, 16 

n.9, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984) (the FAA “creates federal substantive law requiring 

the parties to honor arbitration agreements, [but] . . . does not create any independent 

federal-question jurisdiction under 28 U.S.C. § 1331 (1976) or otherwise.”).

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approach, the amount in controversy is the amount sought in the underlying 

arbitration rather than the amount awarded.”3 Id.; Bull HN Info Sys., Inc. v. 

Hutson, 229 F.3d 321, 329 (1st Cir. 2000); Am. Guar. Co. v. Caldwell, 72 F.2d 

209, 211 (9th Cir. 1934). 

In its order denying Appellants’ motion to dismiss, the district court 

concluded that the demand approach was the correct one: “[e]ach approach has 

strengths and weaknesses, and the issue is one that will be resolved by the 

Fifth Circuit. However, having considered . . . [the cited authority] the Court 

finds that the demand approach is more appropriate.” Pershing, 101 F. Supp. 

3d at 573. 

We agree. Based on Appellants’ arbitration demand of $80 million, the 

district court correctly concluded that the $75,000 amount in controversy 

requirement was met. First, the demand approach recognizes the true scope 

of the controversy between the parties. The only logical assumption about 

Appellants’ efforts to prevent confirmation of this arbitration award is that 

they want a second chance to pursue their claims. The $10,000 award “is but 

the last stage of litigation” that began with an $80 million controversy. 

Pershing, 101 F. Supp. 3d at 573. Therefore, the amount at stake is the $80 

million that Appellants initially sought in arbitration, not the minimal award

for arbitration-related costs.4 

Second, the demand approach avoids the application of two conflicting 

jurisdictional tests for the same controversy. The federal district court has 

 

3 There is a third approach, known as the “remand approach,” which has been held to 

apply if the petition includes a request to remand and reopen the arbitration proceeding. Id. 

That is not the case here. 

4 See Pershing’s motion to confirm arbitration at ¶ 9 (“In their claims, Defendants 

sought to recover as damages their losses in the R. Allen Stanford Ponzi scheme in the 

amount of $80,000,000.”).

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diversity jurisdiction over a motion to compel arbitration based on the amount 

demanded in the petition. Webb v. Investacorp, Inc., 89 F.3d 252, 256 

(5th Cir. 1996). Under the award approach, however, the federal court would 

lack jurisdiction over a later petition to confirm or vacate the arbitration award 

in the same case if the award falls below the jurisdictional threshold. See 

Karsner, at 883-84. “The award approach would promote needless litigation 

and gamesmanship” because “litigants may file potentially frivolous, or 

unnecessary motions to compel arbitration in order to preserve their right to a 

federal forum for review of the eventual award.” Pershing, 101 F. Supp. 3d 

at 574. This they could do by filing a motion to compel arbitration and, once it 

is granted, by seeking a stay of further court proceedings pending motions to 

confirm or vacate the final award. Conversely, under the demand approach, 

purely tactical and meritless litigation will likely be avoided. In these ways, 

the demand approach effectively acknowledges “the close connection between 

arbitration and subsequent enforcement proceedings” and helps “to carry out 

the federal policies in favor of arbitration.” Bull HN Info. Sys., 229 F.3d at 329; 

see also Smith v. Tele-Town Hall, LLC, 798 F. Supp. 2d 748, 755 

(E.D. Va. 2011) (recognizing “Congress’s careful tailoring of the relationship 

between district courts and arbitration panels.”). 

Third, the demand approach allows “the district court to exercise 

jurisdiction coextensive with the diversity jurisdiction that would have 

otherwise been present if the case had been litigated rather than arbitrated.” 

Id. at 884 (internal quotation marks and citation omitted); see also Luong v. 

Circuit City Stores, Inc., 356 F.3d 1188, 1197-98 (9th Cir. 2004) (Kozinski, J., 

dissenting), opinion withdrawn, 368 F.3d 1113 (9th Cir. 2004).5 In essence, 

 

5 “The absurdity of the [award approach] can be demonstrated by considering the 

following example: X claims Y owes him $100,000 in a contract dispute. The case is ordered 

to arbitration, and the arbitrator comes up with an award of $80,000. X claims he was 

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the amount in controversy is measured the same way in federal court for 

litigation and for matters submitted on petitions to compel arbitration: the 

plaintiff’s pleading, not the ultimate result in the case, governs jurisdiction. 

For these reasons, we conclude that “the award approach has the least 

appeal,” while “the demand approach is soundest because it avoids anomalous 

and unwarranted inconsistencies in a federal court’s jurisdiction.” 

Karsner, 532 F.3d at 883; Tele-Town Hall, LLC, 798 F. Supp. 2d at 753. 

Accordingly, we AFFIRM the district court’s order.6 

 

entitled to more and petitions to have the award vacated. Under the [award] approach, the 

district court would have jurisdiction. But if the arbitrator happens to award only $30,000—

or nothing at all—because of the same claimed legal error, the district court would lack 

jurisdiction. There is no principled distinction between the two cases; if the petitioner 

prevails in either case, the award will be vacated and petitioner will be back in arbitration 

seeking his full $100,000. I can see no logic at all in letting the very award that is the fruit 

of the claimed error govern the amount in controversy.” 

6 The concurrence advocates using a case-by-case approach, as opposed to adopting a

general approach (i.e., the demand approach) to determine the jurisdictional amount. The 

concurrence relies on Theis Research, Inc. v. Brown & Bain, 400 F.3d 659 (9th Cir. 2005), and 

interprets the case’s revised opinion as one that adopts a fact-specific analysis and rejects the 

demand approach adopted in the original opinion. Interestingly, the concurrence’s narrow 

interpretation of Theis, which neither party proposes in this case, clashes with a more recent 

Ninth Circuit opinion. See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Moore, 171 F. App’x 

545, 546 (9th Cir. 2006) (quoting Theis, 400 F.3d at 662) (“‘[T]he amount at stake in the 

underlying litigation, not the amount of the arbitration award, is the amount of controversy 

for the purposes of diversity jurisdiction . . . .’”). 

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MICHAEL P. MILLS, District Judge, concurring in result only:

I agree with the majority that the district court correctly concluded, 

based on the facts of this case, that the amount in controversy should be 

decided based on the $20 million demand in arbitration. I write separately 

because I believe that the parties to this appeal have framed the issues in an 

overbroad manner which has led the majority to make a holding which is 

broader than is necessary in this case. I also write to make clear my view that 

many of the legal assumptions underlying this interlocutory appeal are 

erroneous, based largely upon inaccurate descriptions of the state of federal 

precedent set forth in the D.C. Circuit’s opinion in Karsner v. Lothian, 532 F.3d 

876, 882 (D.C. Cir. 2008). 

I understand the majority’s inclination to simply answer the question as 

certified; indeed, that was also my initial inclination. However, in cases where 

an interlocutory appeal is based upon a suspect legal assumption, I feel it is 

incumbent upon us to correct it. This court granted interlocutory appeal to 

resolve the controlling issue of law as to “the proper method of determining the 

amount in controversy for the purpose of establishing diversity jurisdiction 

over a petition to confirm an arbitration award.” The parties to this litigation 

clearly anticipated that, in deciding this issue, this court would choose between 

two alleged “approaches” in this context, namely the “demand approach” and 

the “award approach.” The parties seem to agree that a third alleged 

“approach,” namely the “remand approach,” is inapplicable here.

Certainly, providing clarification to district courts is a laudable goal, 

and, if either the “award approach” or the “demand approach” provided what I 

felt to be reliable standards for assessing amount in controversy issues in 

motions to confirm arbitration awards, I would be only too happy to support 

the adoption of such a rule. However, upon closer review of federal appellate 

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case law in this context, I do not believe that it is either necessary or advisable 

to adopt any such general “approach” in this context. 

I believe that, when one carefully reads the various federal appellate 

decisions in this context and considers the factual scenarios presented, one 

inevitably comes to the conclusion that the vast majority of these decisions are 

quite reasonable. This is true whether the federal appellate decision in 

question considered the amount of the demand, the amount of the award, or 

whether a remand to arbitration is sought to be the most important factor in 

determining the amount in controversy. Karsner instructs us that the federal 

courts are sharply divided into various “approaches” in this context, yet such 

was not true when the D.C. Circuit’s opinion was written. To the extent such 

is true now, this appears to be largely the result of Karsner’s outsized influence. 

Unfortunately, Karsner has become something of a self-fulfilling prophecy, 

since many federal courts, including a number of district courts in this circuit 

(and the one in this case) have accepted Karsner’s premise that the law in this 

context is one in which federal courts must choose a single “approach” when 

determining amount in controversy issues. The majority has likewise accepted 

the Karsner premise in its opinion in this case. 

Like the majority, I initially accepted Karsner’s premise at face value 

and believed that this court was required to choose from the two “approaches” 

which are arguably relevant in this case, namely the “demand approach” and 

the “award approach.” I have since determined, however, that Karsner’s basic 

paradigm is faulty. There is nothing in the U.S. Supreme Court’s 

jurisprudence suggesting that it is either necessary or advisable for circuit 

courts to choose a single factor to be used to determine the amount in 

controversy in all motions to confirm arbitration awards, no matter the 

circumstances. The current version of § 9 of the FAA was enacted in 1947, and 

it seems likely that, if the U.S. Supreme Court intended for the amount in 

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controversy issues in this context to be determined based upon a single factor, 

then it would have so indicated by now. In my view, a federal court’s 

overriding duty is to determine whether the amount in controversy is met in a 

particular case, and I fail to see how any single approach could possibly yield 

the correct result in all cases.

In Karsner, the D.C. Circuit conducted a review of nationwide authority 

in this context and, in so doing, it classified various circuits as following the 

“award approach,” “demand approach” or “remand approach.” Karsner’s 

classifications in this regard, even at this late stage in the law, appear to be 

suspect. I note that certain circuit court decisions which were described by 

Karsner as following the “award approach” were actually quite narrow 

decisions which included no language adopting any rule of general 

applicability. In Baltin v. Alaron Trading Corp., 128 F.3d 1466 (11th Cir. 

1997), for example, the Eleventh Circuit’s analysis of whether diversity 

jurisdiction existed was simply as follows:

Finally, we must determine whether the district court had 

diversity jurisdiction over this case. See 28 U.S.C. § 1332(a). The 

maximum remedy sought by the Baltins was the vacatur of the 

arbitration award of $36,284.69.16. Diversity jurisdiction did not 

exist because it was a “legal certainty” that the amount in 

controversy was less than $50,000, the amount required for federal 

diversity jurisdiction at the time the Baltins filed suit.

Baltin, 128 F.3d at 1472.

Similarly, in Ford v. Hamilton Inv., Inc., 29 F.3d 255 (6th Cir. 1994), the 

Sixth Circuit, in finding that the amount in controversy requirement was met 

in that case, wrote that:

Mr. Ford's complaint alleges that the arbitration panel awarded 

Hamilton Investments $26,666.63, plus $3,857.53 in interest. The 

total of these figures obviously does not exceed $50,000. In the 

arbitration proceedings Mr. Ford claimed more than $50,000 

against Hamilton Investments, but he never asked the district 

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court to order that the arbitrators reopen his claim against 

Hamilton Investments; all he sought from the district court was 

the vacation of an award that fell short of the jurisdictional amount 

by almost $20,000.

Ford, 29 F.3d at 260.1

In my experience, circuit courts which seek to adopt particular standards 

as binding in future cases generally do so after considering a wide variety of 

factors applicable not only to the case at bar, but also to other cases as well. 

There is no such analysis contained in these two decisions, nor do either of 

them cite another decision from their circuit as dictating a specific factor which 

they must consider in determining the amount in controversy. It thus seems 

clear to me that the circuit courts in Baltin and Ford simply concluded that, 

based on the facts before them, the amount in controversy issue should be 

decided based on the amount of the award in those cases, with no attempt to 

adopt a general “approach” in this context.2

 

While I agree with the district court that the amount of the demand is 

most relevant in this case, I believe that the results reached in Baltin and Ford

were quite reasonable, based upon the facts presented in those cases. Without 

delving too deeply into the facts of Baltin and Ford, I note that they each 

involved factual scenarios where it was clear, at the time of the filing of the 

federal action, that no party was continuing to seek recovery in excess of the 

jurisdictional amount. Baltin and Ford each involved motions to vacate 

 

1I note that, in a decision written after Karsner, the Second Circuit similarly 

considered the amount of the award most relevant, without adopting any “approach” in this 

regard. See Fernicola v. Toyota Motor Corp., 313 Fed. App’x. 408, 409 (2d Cir. 2009).

2This is made even clearer in the case of the Eleventh Circuit which, as discussed 

below, later found a plaintiff’s request for a remand to arbitration to be dispositive, while 

emphasizing that this result was consistent with Baltin. See Peebles v. Merrill Lynch, Pierce, 

Fenner & Smith Inc., 431 F.3d 1320, 1325–26 (11th Cir. 2005).

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arbitration awards which were filed by parties who had received adverse 

financial judgments against them in arbitration, in an amount below the 

federal jurisdictional amount.3

 As noted in the aforementioned quotations, 

each of the petitioners in those cases sought to have the arbitration verdicts 

against them reduced to zero, and the circuit courts in those decisions thus 

found that the arbitration awards represented the upper limit of any financial 

award which might result from the motions to vacate. That strikes me as being 

a quite reasonable conclusion based upon the facts of those cases.

In this case, by contrast, appellee is only too happy to pay the $10,000 

arbitration award entered against it; indeed, it has tendered that amount to 

appellants. Moreover, appellee filed its motion to confirm under circumstances 

where it had every good faith reason to believe, as was confirmed by 

subsequent events, that appellants would oppose the arbitrator’s award, with 

a clear goal of obtaining recovery in excess of the jurisdictional amount. Thus, 

in this case, unlike in Baltin and Ford, the arbitrator’s award represents the 

lower, not the upper, range of possible results from litigation relating to the 

validity of the arbitrator’s award. Accordingly, the amount of the award in 

arbitration constitutes a far less reliable basis for evaluating the amount in 

controversy here than in Baltin and Ford. This illustrates the quite simple 

point that different cases are different and that different factors may be 

relevant in resolving them. 

I also note that some of the decisions which Karsner described as 

following a particular approach purported to be consistent with decisions 

which ostensibly follow a different approach. Indeed, Karsner described the 

 

3In my view, the fact that Baltin and Ford involved motions to vacate, rather than 

confirm, arbitration awards does not remove their relevance in this case. Indeed, both sides 

to this appeal have relied upon authorities relating to both motions to confirm and vacate 

arbitration awards, and it seems to me that similar principles should apply to each.

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Ninth Circuit’s decision in Theis Research, Inc. v. Brown & Bain, 400 F.3d 659, 

664–65 (9th Cir. 2005) as adopting the “demand approach,” but Theis cited, 

with apparent approval, the Baltin and Ford decisions, which, once again, have 

been cited as following the “award approach.” In harmonizing its result with 

that in Baltin, for example, the Ninth Circuit in Theis noted that the Eleventh 

Circuit had stressed that the plaintiffs in Baltin “did not request an award 

modification that would provide[them] with money. Instead, [they] sought 

merely to reduce or eliminate the arbitration award against them.” Theis, 400 

F.3d at 664, citing Baltin, 128 F.3d at 1472, n. 16.

If what Karsner described as leading circuit court decisions in favor of 

the “demand approach” and the “award approach” are actually in substantial 

agreement with each other, then I must wonder how real these alleged 

“approaches” actually are. In so stating, I note that Karsner described the First 

Circuit’s decision in Bull HN Info. Sys., Inc. v. Hutson, 229 F.3d 321 (1st Cir. 

2000) as “applying” the “demand approach,” but this characterization clearly 

seems inaccurate. Indeed, the First Circuit specifically reserved judgment on 

this issue, writing that:

Hidden in the issue is another issue which we note but do not 

resolve. That is whether the amount requirement is met where 

the sums at issue before the arbitrator at the start of the 

arbitration exceed $75,000, the final (non-partial) award is for less 

than $75,000, and the federal judicial relief sought is merely 

vacating and dismissing or merely confirming the award.

Bull, 229 F.3d at 329. The First Circuit instead decided the amount in 

controversy issues in that case based upon factors specific to bifurcated 

arbitration proceedings, see id., and it thus seems quite clear that Bull neither 

adopted nor followed any general “demand approach.”

Giving Karsner the benefit of the doubt, it could be argued that the term 

“approach” is itself ambiguous and that the reference to a court following a 

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particular “approach” does not necessarily mean that it would never follow a 

different approach. At a bare minimum, however, the Karsner approach is 

confusing, and district courts in this circuit have interpreted the decision as 

requiring courts to single out one factor to elevate above all others. See, e.g. 

Busby v. Bruce Massey Const., LLC, 2015 WL 7015349, at *1 (S.D. Miss. Nov. 

12, 2015); Curbelo v. Hita, 2009 WL 2191084, at *4 (W.D. Tex. July 22, 2009). 

Removing confusion in this regard seems reason enough to distance ourselves 

from Karsner. 

In deciding whether to adopt a general approach in this regard, I 

consider it quite significant that one federal circuit which initially appeared to 

adopt such an approach quickly thought better of the idea. Indeed, on motion 

for rehearing, the Ninth Circuit in Theis modified its opinion to replace 

generalized language consistent with an “approach” to one which merely made 

a case-specific finding that the amount of the demand in arbitration was most 

relevant in that case. In other words, the Ninth Circuit modified its opinion to 

do exactly what this concurrence recommends. Specifically, the Ninth Circuit 

in Theis deleted a sentence including the language:

Our conclusion that we measure the amount in controversy by the 

amount at stake in the underlying litigation is consistent not only 

with American Guaranty from this circuit, but with decisions from 

other circuits as well. 

Theis, 400 F.3d at 661. The deleted sentence was replaced with the following 

sentence:

Our decision to measure the amount in controversy in this case by 

the amount at stake in the underlying litigation is consistent not 

only with American Guaranty from this circuit, but with decisions 

from other circuits as well.

Id. 

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Thus, the Ninth Circuit deleted generalized language stating that “we 

measure the amount in controversy by the amount at stake in the underlying 

litigation” and replaced it with far more limited language stating that the court 

was merely finding “in this case” that the amount in controversy should be 

measured on that basis. In its revised opinion, the Ninth Circuit specifically 

noted the modifications to its opinion, writing that:

With the foregoing amendments, the panel has voted unanimously to deny 

the petition for rehearing. Judge Trott has also voted to deny the petition for 

rehearing en banc, and Judges Thompson and Weiner recommend denial of 

that petition.

Id. at 661. The clear implication of the above is that, after initially releasing 

an opinion which included generalized language adopting something like a 

“demand approach,” the Ninth Circuit quickly realized that its holding gave 

rise to conflicts with reasonable decisions from other circuits and accordingly 

modified its opinion to make a case-specific holding and thereby avoid having 

to rehear the case, either in panel or en banc. 

It seems clear from the manner in which the Ninth Circuit framed the 

issues in Theis that it initially intended to adopt a broad holding setting forth 

that circuit’s approach to amount in controversy issues in this context. I can 

discern no reason why the Ninth Circuit would have modified its opinion in the 

manner it did other than to greatly narrow its holding. The fact that it was 

the Ninth Circuit’s intent, in modifying the language in question, to move away 

from any “demand approach” is made even clearer by the fact that the modified 

language immediately preceded the portion of the opinion where the court 

wrote approvingly of the Baltin and Ford decisions. Clearly, an opinion can 

not be said to have adopted the “demand approach” if it writes approvingly of, 

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and claims to be consistent with, decisions which deem the amount of the 

award most relevant.4

I do not wish to be cumulative or unnecessarily harsh in criticizing 

Karsner, but since that decision’s logic undergirds the majority’s opinion, I will 

note another instance in which the decision inaccurately characterized another 

circuit’s precedent. Specifically, the D.C. Circuit wrote that the Eleventh 

Circuit, which it described as initially “follow[ing] the award approach” in 

Baltin, “appear[ed] to have more recently adopted the remand approach.” 

Karsner, 532 F.3d at 882-83, citing Peebles v. Merrill Lynch, Pierce, Fenner & 

Smith Inc., 431 F.3d 1320, 1325–26 (11th Cir. 2005). I submit, however, that 

both Baltin and Peebles represent entirely logical and correct determinations 

of amount in controversy issues based on the facts of each case and that, 

contrary to Karsner, neither decision adopted an “approach” inconsistent with

the other. 

Indeed, the Eleventh Circuit in Peebles made it clear that it regarded its 

decision as consistent with Baltin, writing that:

This issue is a matter of first impression for this court. Baltin does 

not speak to the issue raised here because “the maximum remedy 

sought” by the investors was the vacatur of the arbitration award 

against them that did not exceed the minimum required to satisfy 

28 U.S.C. § 1332. 128 F.3d at 1472. Here the maximum remedy 

Peebles sought was vacatur of a zero dollar arbitration award and 

 

4The majority notes that, in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Moore, 171 

F. App’x 545, 546 (9th Cir. 2006), the Ninth Circuit quoted certain language in Theis which 

had not been modified in support of the application of a broad demand “approach.” In my 

view, this simply reflects the fact that Theis was originally written to adopt the demand 

approach, and it appears that the Ninth Circuit modified the bare minimum of language in 

the opinion so as to assuage the concerns of judges who did not wish to adopt such a broad 

approach. Once again, the intent of the Ninth Circuit in Theis seems clear in light of the fact 

that the Court specifically praised, and claimed to be consistent with, Baltin and Ford. It 

seems self-evident that, if the Ninth Circuit would regard the amount of the award as being 

the determining factor in an appropriate case, then that circuit does not follow the “demand 

approach” at all. I do not believe that this circuit should do so either.

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a new arbitration hearing at which he could urge his argument 

that he was entitled to up to $2,000,000 in damages. We hold that 

a federal court has subject matter jurisdiction where a party 

seeking to vacate an arbitration award is also seeking a new 

arbitration hearing at which he will demand a sum which exceeds 

the amount in controversy for diversity jurisdiction purposes. This 

approach is consistent with the approach taken by other circuits 

that have had occasion to address this question. See, e.g., Theis 

Research, Inc. v. Brown & Bain, 400 F.3d 659 (9th Cir. 2005); Bull 

*1326 HN Info. Sys., Inc. v. Hutson, 229 F.3d 321 (1st Cir. 2000).

Peebles, 431 F.3d at 1325–26. I find the logic of both Baltin and Peebles to be clear, 

and I believe that Karsner was simply incorrect in its characterization of these 

decisions.

I submit that most of the federal appellate authority in this context may 

be easily reconciled with each other and that such precedent may serve as 

persuasive authority for district courts to consider. This is particularly true if 

the decisions are analyzed from a paradigm of common sense, rather than 

“approaches.” For example, I believe that a district court reviewing the facts 

of this case and Theis would be able to readily understand why the amount of 

the plaintiffs’ demand was deemed most relevant, as opposed to cases like 

Baltin and Ford, where the amount of the award was considered dispositive. 

By the same token, I think a district court would readily understand why the 

Eleventh Circuit in Peebles, faced with a plaintiff seeking a remand to 

arbitration, viewed that fact as trumping the amount of the award in 

arbitration, thus rendering Baltin distinguishable. Indeed, as a simple matter 

of common sense, it is illogical to consider the award in arbitration dispositive 

if the plaintiff is seeking to return to arbitration, where he might seek an 

amount greater than the award. Recognizing this fact does not require the 

adoption of the “remand approach”; it merely requires the application of 

common sense.

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Given that there are reasonable federal appellate decisions finding each 

of the three factors relevant in this context, I can see no benefit to following 

the Karsner approach of selecting a single factor to elevate above the other two. 

Indeed, it appears to me that there may well be additional factors which are 

relevant in this context. For example, consider a situation in which a plaintiff 

makes a demand in arbitration which is completely unrealistic. Assume, for 

example, a case in which a plaintiff sought $10 million in an arbitration action 

in which his sole claim was for property damage to his vacuum cleaner. 

Assume further that the arbitrator awarded only the $200 fair market value 

of the vacuum cleaner and that a motion was filed in federal court to confirm 

that award. In my view, a district court should have the discretion to take a 

realistic look at the facts of that case and determine that, notwithstanding the 

amount of the demand in arbitration, the amount in controversy requirement 

was clearly not met. Such a finding would strike me as entirely reasonable, 

even though it does not fit within one of the three alleged “approaches.” I 

simply do not see the benefit of attempting to unduly limit the discretion of 

district courts to decide amount in controversy issues in this context. 

As an additional point, I note that adopting the “demand approach” (or 

any other approach) would also run counter to the approach this circuit has 

taken in a closely analogous legal context, namely declaratory judgment 

actions filed by liability insurers. Conceptually-speaking, motions to confirm 

arbitration awards are quite similar to declaratory judgment actions, since 

they essentially seek a judicial declaration that an arbitration award is a valid 

one under the applicable legal standards. It is thus significant, in my view, 

that this circuit has adopted quite broad and flexible standards for determining 

the amount in controversy in declaratory judgment actions filed by insurers. 

In St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250 (5th Cir. 1998), 

the plaintiff insurance company sought a declaration of liability arising from 

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its denial of the insured's claim. In this context, this court concluded that the 

amount in controversy is “the value of the right to be protected or the extent of 

the injury to be prevented.” Greenberg, 134 F.3d at 1253. Clearly, this is a 

quite broad and flexible standard, and, while this court has frequently relied 

upon the amount of the plaintiff’s demand in assessing the amount in 

controversy in declaratory judgment actions, it has adopted no categorical rule 

in this regard. In Hartford Ins. Group v. Lou–Con Inc., 293 F.3d 908 (5th Cir. 

2002), for example, this court found that the amount in controversy 

requirement was not met in that declaratory judgment action, based partly on 

the limited nature of the insurance claims in that case. Hartford, 293 F.3d at 

912. This court also noted, however, that we might consider different factors 

in certain other insurance cases. For example, this court noted that “under 

certain circumstances the policy limits will establish the amount in 

controversy,” particularly in cases relating to the “validity of the entire 

contract between the parties.” Id. at 911, citing 14B Charles Alan Wright, 

Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: 

Jurisdiction 3d § 3710 (3d ed. 1998). 

Thus, this court has recognized that a categorical rule adopting a variant 

of the “demand rule” in the declaratory judgment context would be unwise and 

that greater flexibility in amount in controversy standards is required. I 

believe that such a flexible approach would serve this circuit well in the instant 

context as well. In my view, the simple fact is that there is no “one size fits all” 

solution in this context and that adopting an “approach” whereby all amount 

in controversy issues are decided based upon a single factor simply does not 

work. I believe that our circuit’s standards in the declaratory judgment context 

demonstrate that we can offer district courts guidance on making amount in 

controversy determinations without unduly tying their hands. 

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In light of the foregoing, I agree with the majority that the district court 

properly relied upon the plaintiffs’ demand in arbitration in deciding that the 

amount in controversy requirement was met in this case, but I would decline 

to adopt any categorical “approach” in this context. While the “demand 

approach” works well enough in this case, I believe it will lead to incorrect 

results when this court is faced with a case involving facts such as those in 

Baltin or Ford. I therefore respectfully concur in result only.

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